CONGRESS SHOULD ADJOURN. JUST GO HOME.
–More thoughts on the bailout
1. CONGRESS SHOULD ADJOURN. JUST GO HOME.
–The immediate question, right now, is whether the bailout bill can still be defeated in Congress. I have no prediction about the outcome—though obviously I hope it will be defeated. But it is a reasonable prediction that the news media, today and tomorrow, will be filled with horse-race treatment on the topic. We all know the kind; it was the kind of media treatment that the Bush team got when trying to gin up the war with Iraq. This is the kind of thing the big media outlets do whenever possible, even when one outcome is unthinkably horrible: Will Sarah Palin get through the debate without revealing her ignorance and incapacity? [etc] We could avoid seeing our major media outlets throw some more credibility, as well as save our nation some fiscal dreadfulness, if Congress would just adjourn. Take the autumn recess.Go home.
2. More on immediate remedies: Persons gifted with hundreds of millions of dollars should pick a county and, forthwith, start paying off hard-working fellow Americans’ mortgages. Pick a county, any county [thanx to Groucho Marx]—the one they grew up in, the one they live in, the poorest county in the nation; the single county hardest hit—whichever that might be—by the current ‘liquidity problems’; the county they were born in; the county their parents were born in; etc. Be sentimental. Be clinical. I don’t care. Just pick one, bonanza winner. Secretary Paulson, you could set the example.
Or they could pick a zip code: Admittedly even a multi-millionaire, could not single-handedly carry away the mortgage debt of a whole state, with the possible exception of Montana. But our country does have individuals—and this is a historic inequity—who could single-handedly carry away the mortgage debt of, say, the ten poorest zip codes in the U.S. [Disclaimer: This proposal contains nothing that could benefit me personally; for one thing, my mortgage is paid off, via the wonder of EE Series U.S. savings bonds; for another, I do not live in one of the 10 poorest zip codes.] [N.b.: This is what I would do if I were to win some mega-lottery.] Paulson is not the only figure who could carry out this feat, of course; VP Cheney, several members of the Bush family, and a number of former CEOs of current and former companies could do likewise.
3. Speaking of personal interest, it is somewhat remarkable how little our journalists are being held to any standard of disclosure, while they scream in favor of the bailout. The WashPost’s Dana Milbank, e.g., published an uncharacteristically heated column Tuesday on how ‘the lunatics had taken over the asylum’ in Congress, and Milbank is not exactly an apache. There is a real question re which journalists screaming in favor of the bailout have 401(k)s affected temporarily by the drop on the stock market on Tues—that kind of bloodthirsty fervor is usually the sign of the small investor—but you notice they’re not saying. Their editors are not making them follow the principle of journalistic disclosure—Hey, why shd they have to follow the rules when their richers and betters don’t. [Disclaimer: In the interest of full disclosure, I am not checking how the immediate situation affects my own family, so I do not know whether I am writing against interest. Obviously I think that our long-term interest, including mine, wd be better served other ways.]
Anyway, an astounding assortment of historians, economists, pop-economists and other commentators weighing in on behalf of this bailout—including some whose commentary I generally respect–are not being required to disclose their personal, individual stake in the topic.
4. A serious list of 200 well-respected economists oppose the bailout. That shd be a sign.
5. And oh yes, on that topic of inflation: GIVEN THE POTENTIAL FOR HYPER-INFLATION IN PUMPING A TRILLION DOLLARS INTO THE FINANCIAL SECTOR, ONE COULD REASONABLY SUSPECT how little the Fed’s concern was ‘inflation,’ all those times it raised the key interest rate, before. Washington novelist David Baldacci (I think–can’t remember the title of the novel) has a passage in one of his whodunits, on how the Fed knows exactly, can compute exactly, the ripple effect of human loss, every time it raises the interest rate: for every quarter of a point, thus much job loss, marital breakups, spikes in gambling and substance abuse . . .
Either it’s going to be hard for the Fed to have credibility, in coming months, raising interest rate to contain ‘inflation,’ or real inflation will give them cover to do exact that—right when the new Obama administration comes in.